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The following are the unit costs of making and selling an item at a volume of 30,000 units per month, which represents the company's capacity:
The following are the unit costs of making and selling an item at a volume of 30,000 units per month, which represents the company's capacity: Manufacturing: Direct materials Direct labor Variable overhead Fixed overhead Selling and administrative: Variable Fixed $ 6.10 12.10 2.10 4.10 8.10 10.10 Assume the company has 300 units left over from last year which have small defects and which will have to be sold at a reduced price as scrap. This would have no effect on the company's other sales. The variable selling and administrative costs would have to be incurred to sell the defective units. The cost that is relevant as a guide for setting a minimum price on these defective units is: (Round your answer to two decimal places.) $32.50 per unit. O $36.40 per unit. O $8.10 per unit $18.20 per unit The following are the unit costs of making and selling an item at a volume of 30,000 units per month, which represents the company's capacity: Manufacturing: Direct materials Direct labor Variable overhead Fixed overhead Selling and administrative: Variable Fixed $ 6.30 12.30 2.30 4.30 8.30 10.30 Assume the company has 300 units left over from last year which have small defects and which will have to be sold at a reduced price as scrap. This would have no effect on the company's other sales. The variable selling and administrative costs would have to be incurred to sell the defective units. The cost that is relevant as a guide for setting a minimum price on these defective units is: (Round your answer to two decimal places.) O $33.50 per unit $8.30 per unit $37.20 per unit $18.60 per unit The Hudson Corporation has 7,200 obsolete units of a product that are carried in inventory at a manufacturing cost of $144,000. If the units are remachined for $32,800, they could be sold for $64.000. Alternatively, the units could be sold for scrap for $29,800. The alternative that is more desirable and the total relevant costs for that alternative are: remachine: $32,800 scrap: $144,000. scrap: $114,200. remachine: $176,800
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